Rystad Energy in a June 29th press release reported that its most recent assessment of the true size of the world’s proved oil reserves stands at 285 billion barrels, a value only one-sixth of the widely accepted value of around 1700 billion barrels. Insiders have long known of this extraordinary discrepancy, but it may come as a surprise to many.
The widely accepted global proved oil reserves are those published by organisations such as the US EIA, OPEC, Oil and Gas Journal, World Oil and BP’s Statistical Review of World Energy; and then copied into websites including Our World in Data, Worldometer and Statista. These reserves data are those generally provided by the governments of the oil-producing countries concerned, and so are considered ‘official data’.
By contrast, Rystad Energy’s proved oil reserves estimate is very much lower for two main reasons: In the 1980s, the proved oil reserves declared by some OPEC producers became significantly overstated as they competed for production quotas based partly on the size proved reserves. More recently, large quantities of the non-conventional oils of Canada’s tar sands and Venezuela’s Orinoco oil have been counted as proved, even though Rystad states that most of this oil should not be classed as ‘proved’ under the standard oil industry definition.
Proved oil reserves are of course only a part of the total amount of oil that can be produced in the future. To proved oil reserves must be added probable reserves to arrive at the statistically most likely ‘proved-plus-probable’ value (which Rystad estimates at about 500 billion barrels), and more oil will be discovered, and recovery techniques will improve. Moreover, there are indeed very large quantities of non-conventional oils and other liquids that can be potentially exploited in the future, including those in Canada and Venezuela, and also by producing oil from kerogen in rock, from gas and coal, and synthetically. But nearly all these sources are significantly more difficult - and hence more expensive - to produce, and also have higher CO2 emissions. Given these difficulties, Rystad’s analysis suggests that the world needs to become more aware of the true size of its proved oil reserves.
By Roger Bentley for Oilprice.com
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